Unemployment Rate Might Reach 10%
Bloomberg reports:
The jobless rate in the U.S. is likely to approach 10 percent in coming months as the economy fails to grow enough to employ people rejoining the labor force, economists said.
Private payrolls climbed 67, 000 in August, after a gain of 107,000 the previous month, and the unemployment rate rose to 9.6 percent, the Labor Department reported Sept. 3. The median forecast in a Bloomberg News survey of economists called for an increase of 40,000. The economy expanded at a 1.6 percent annual rate in the second quarter, down from 3.7 percent in January through March.
Only 723,000 people were added to company and government payrolls so far in 2010, or 8.6 percent of the 8.4 million jobs lost during the recession, which began in 2007 and is the biggest employment slump in the post-World War II era. Still, the August job figures eased concerns the economy will falter because businesses are adding to their workforce and reduced the odds the Federal Reserve will ease policy at its Sept. 21 meeting.
“Growth is too sluggish to successfully bring down the unemployment rate,” said Michelle Meyer, a senior economist at BofA Merrill Lynch Global Research in New York. “At this stage, about one year into the recovery, this was still quite feeble job growth.”
BofA Merrill Lynch on Sept. 1 said the jobless rate will peak at 10.1 percent next year, up from a previous projection of 9.5 percent, with growth slowing to 1.8 percent for all of 2011, down from an earlier estimate of 2.3 percent.
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